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Idaho company fined $900,000 for violating oil regulations

BISMARCK – The North Dakota Industrial Commission fined an Idaho company $900,000 on Tuesday for a dozen alleged violations of oil regulations, including two saltwater spills discovered in November and January that have yet to be cleaned up.

Alturas Energy LLC was served with the complaint on April 2 and hasn’t responded, allowing the state to issue a default order.

The state will now ask a district court judge to enforce the order through a judgment against the company. If granted, the state can move to garnish the company’s income, confiscate equipment, saleable oil and wells and seek reimbursement for the cost of plugging abandoned wells, Department of Mineral Resources Director Lynn Helms said.

“I think it’s important, especially with the lower oil price paradigm that we’re in, that we send a message to companies that we mean business,” he said.

Alturas purchased eight wells and a treating plant in 2010 in McKenzie County in the Fairview area near the North Dakota/Montana border, and since then, the state has struggled to get the company to comply with regulations, Helms said.

The complaint alleges that the company failed to plug an abandoned well and remove two unused 400-barrel tanks that have laid on their side since June 2012.

The two saltwater spills observed at separate wells Nov. 5 and Jan. 28 were contained by dikes on site, but the saltwater has evaporated, contaminating aggregate and the clay liner, Helms said. He said there’s potential for further contamination if a heavy rain were to fall.

Helms said the state will wait for the court order to begin cleaning up the site, but added it will be done before fall freeze-up.

Helms said the company is probably financially distressed, noting simple repairs at the well sites hadn’t been made, and that such cases aren’t uncommon.

“Every time that we see prices drop like this, we see anywhere from a handful to a dozen cases like this,” he said.

The violations, which are for six wells in McKenzie County, also include failing to file a spill report, failing to report accurate sworn statements showing the amount of injection for two saltwater disposal wells, failing to have sufficient dikes around locations and failing to file a well bond, according to the complaint.

A phone listing for Alturas Energy in Hailey, Idaho, was no longer in service. A message left for a Sidney, Mont., office of Alturas Energy was not returned Tuesday.

Forum News Service Amy Dalrymple contributed to this article.

Mike Nowatzki

Mike Nowatzki reports for Forum News Service. He can be reached at (701) 255-5607.